The number of foreclosure starts nationwide did an about-face in February after jumping to their highest level in 13 months in January, according to Black Knight Financial Services' February 2015 First Look at Mortgage Data released Monday.
Foreclosure starts dropped by 15 percent month-over-month in February, down to 79,700, the lowest level since November 2014 and their third lowest total for any month in at least seven years, according to Black Knight. This decline in foreclosure starts came just one month after the number swelled to 94,300 in January, the highest level since December 2013. Analysts concluded at that time that the spike in foreclosure starts for January was likely due to seasonality and not a forming trend.
In addition to the decline foreclosure starts experienced in February, a couple of other foreclosure statistics dropped to pre-recession levels for the month. Foreclosure inventory fell below 800,000 (a nearly 30 percent decline) for the first time since December 2007. The nationwide foreclosure inventory was more than 1.1 million just one year earlier in February 2014.
Another number that experienced a large decline was the delinquency rate, which fell by 10.2 percent year-over-year down to 5.36 percent (about 2.7 million properties) – the lowest level since summer 2007. The number of mortgage loans 30 days or more past due or in foreclosure, or the non-current inventory, totaled 3.51 million in February – a year-over-year decline of nearly 600,000.
Mississippi was the state with the highest percentage of non-current mortgage loans in February at 13.49 percent, followed by New Jersey, Louisiana, New York, and Rhode Island, according to Black Knight. The state with the lowest non-current loan percentage for the month was North Dakota with 2.41 percent, followed by Colorado, South Dakota, Minnesota, and Montana.
Black Knight's First Look at February data indicates that more homeowners are refinancing. The monthly prepayment rate, which is historically a good indicator of refinance activity, was at 1.16 percent for the month – an increase of 31 percent from January and of 75 percent from February 2014.